Monday, March 9, 2015

Indices Diverge from Underlying Indicators - March 9 Close

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This will be short.

No change in timers -- short and intermediate term are CASH, long-term is LONG.

Targeting 25-33% equity exposure -- see yesterday's blog.

The major indexes were up today, but I'm not a believer.

Case-in-point #1:  Cumulative Tick



Right click on the image to open in a new tab or window.

Discussion:  Top trace:  more 52-week New Lows (red) than 52-week New Highs (green).  Big warning sign; certainly do not buy stocks.

Middle trace:  500 stock/min filter on the cumulative tick, ticked DOWN mid-day but was more/less flat to negative.  More selling than buying today.

Bottom trace:  The white trace is the instantaneous cumulative tick.  As you can see, it stayed flat all day.  The trends are down.  Since White Below Red, no buying.  Period.

Case-in-point #2:  LCR Table


Discussion:  the LCR FELL today, a certain divergence from the price action of the indexes.  All the slopes (on all major time frames) are negative, which is not supportive of price increases in the markets.

On the right, we see that the shorter "acceleration" measurements are trying to break out, but they are unable to (mostly red above 13d).  We need green on the right before we see green on the left, so we have a major divergence.

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There is nothing here that indicates we should be in the markets.  My cash target is 67% - 75% cash,   Today's 1% TSL on my selling positions was not favorable to getting out, but that's by design.  If tomorrow is a down day they will trigger and I'll be out.

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Remember, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.

Regards,

pgd